Bristow said the NEMMCO ANTS (transmission planning document) “has no choice but to presume the current policy environment will stay in place unaltered and with certainty for the duration of the modeling. While this may be reasonable for the purposes of a high level transmission feasibility assessment that the ANTS serves, it is not a view that real world investor can take.” He e also said TRUenergy differed from the NEMMCO data and showed NSW baseload was needed by 2012. RUenergy planned a 400MW Combined Cycle Gas Power Plant at Tallawarra, NSW.

What real-world investors need: Bristow said “In (the) case of carbon risk, real world investor do need to factor this into their decisions, and this is likely to push them to consider options other than coal”.

Where NEMMCO data got it wrong: Bristow said ” As an example, the 2005 SOO/ANTS estimated that a 500MW coal plant may be economic in NSW in 2009/10. Today it is clear this is not the case and in fact peaking investments have proved the best way to meet the requirements for additional supply. We can also compare the 2005 forecast with that in 2006, which indicated no coal investment is required until the 2012/13 period.

Provides high load factor investment forecast:“Despite qualification with respect to its projected plant mix, the SOO/ANTS does provide a public perspective of when high load factor investment may be required.

LRMC cost similar for high load coal and gas: “LRMC cost differences between gas and coal are not that great for high load factor plant and therefore promoting an error in the most economic fuel type probably has had little adverse impact upon the transmission assessment”.

ANTS generation forecast queries:Bristow said…

Demand forecasts overstated: Since 2006 ANTS was created, both SA and Victoria have significantly reduced their demand projections, this is likely to significantly reduce investment requirements, and may well impact on investment in NSW”, he said.

Cost data understated ACIL Tasman has issued a new view of generator costings prepared for use in the 2007 SOO/ANTS modeling. Significant increase in capital costs were noted in the forecasts, which will tend to impact more heavily on coal than gas. Our conclusion is therefore that while the SOO/ANTS provides a perspective on when additional supply may be required, it should not be used as the primary source for determining the actual generation options that will best meet the demand”.

In NSW TRUenergy was developing a 400MW Combined Cycle Gas Power Plant at Tallawarra. The key factors were good access to gas and electricity transmission, water and other important resource, the Tallawarra site was one of the most competitive in the NEM; and the GGAS scheme extension – ” extending the GGAS scheme 2020 provided an important additional revenue stream for the project. But Bristow said “policy changes will be required before we can significant expand our exposure to the NSW generation market. In particular access to a large mass market retail customer base will be required to allow us to commit to a major base load investment. In preparation for a more attractive policy environment TRUenergy is already positioning itself and is well advanced in permitting an additional 400MW open cycle gas turbine plant at the Tallawarra site. The Tallawarra B project is scheduled to be commissioned in 2009.

NSW baseload needed by 2012:The TRUenergy view was “base load investment could be required from as early as 2012, however there is significant uncertainty in the forecase, and credible cases can be made out to 2015/16″, said Bristow. ” We note that in SOO/ANTS report, NEMMCO modeling introduces high load factor coal plant from as early as 2012/13″.

Fit for the purpose: “In considering ANTS forecasts, it is important to keep in context the purpose for which they are created. The single purpose of the ANTS to provided a high level assessment of possible economic transmission investments. NEMMCO has no role in evaluating or promoting an optimal generation mix. Rather, in order to create scenarios that can be used transmission options, some assumptions future on future generation investment are required, and the NEMMO modeling takes a mechanical approach to this estimates an “economic” future plant investment scenario given a range of assumptions”.